Company Number: 13645287

Analysis Date: 2025-07-20 14:39 UTC

1. Risk Rating: MEDIUM
   Justification: While the company has returned to a positive net current asset position as of the 2024 year-end, its financial history shows prior years of negative working capital and shareholders’ funds. The extremely low cash balance in 2024 (£80) despite high current assets (largely in stocks and debtors) could pose liquidity risks. The company is relatively new (incorporated in 2021) and operates in property development, a sector with inherent project and market risks.

2. Key Concerns:

• Liquidity Risk: Cash on hand dropped sharply from £202k in 2023 to just £80 in 2024, suggesting tight immediate liquidity despite positive net current assets. Heavy reliance on stock and debtors may not translate quickly to cash.
• Working Capital Volatility: Net current assets shifted from a significant negative position in prior years (-£467k in 2023) to a marginal positive (£7k in 2024), indicating potential instability in managing short-term obligations.
• Related Party Balances: Substantial amounts owed to related parties (£153k to Brockwell Group (Holdings) Limited and £205k to Brockwell Group Limited) could indicate reliance on intercompany financing which may mask underlying cash flow stress.

3. Positive Indicators:

• Improved Financial Position in 2024: The company moved from a negative net asset position to a small positive, reflecting some operational improvement or asset realisation.
• Compliance with Filing: Accounts and confirmation statements are up to date with no overdue filings, indicating sound regulatory compliance and governance in this regard.
• No Signs of Insolvency or Liquidation: The company is active and not undergoing liquidation or administration, and floating charges have been satisfied, which may reflect positive creditor relationships.

4. Due Diligence Notes:

• Investigate the nature and liquidity of the stock (£1.9m) and debtors (£793k) to assess how quickly these assets can be converted into cash to meet liabilities.
• Review cash flow statements and forecasts to understand the cause of the drastic reduction in cash and the company’s ability to meet immediate obligations.
• Examine the terms and conditions of intercompany loans and balances to evaluate potential contingent liabilities or risks to financial stability.
• Understand project pipeline, revenue recognition policies, and the impact of market conditions on the property development sector for this company.
• Confirm director and shareholder backgrounds and assess whether the shareholders’ structure and control (three PSCs with 25-50% voting rights) could influence decision-making and financial support.